Technical Scoop: Domination Repeat, Cheap Oil, Rate Rise

Excerpt from this week's: Technical Scoop: Domination Repeat, Cheap Oil, Rate Rise

Gold and silver

Source: www.stockcharts.com

Gold continues to drag along its recent lows. We suppose that’s good news as we’ve not made any new lows.

The low was seen almost three weeks ago at $3,941. Since then, we have held the $4,000 level; however, we’ve made little or no progress higher. The recent high was $4,203. Resistance is now seen at $4,250 and

especially at $4,500. We won’t start to feel comfortable that we’ve made a potential low until we are through

$4,600 and preferably even $4,700. The good news is we’ve entered a more positive seasonal period for gold and we could be making lows. Naturally, we want to see $4,000 hold. If it doesn’t, we could soon find ourselves at $3,800 and even $3,400. But that should be it.

Gold did rise this week, up 0.9%. We were encouraged by silver making a 4.1% gain and the gold stocks also up with the Gold Bugs Index (HUI) up 5.7% and the TSX Gold Index (TGD) gaining 6.3%. If we are to rise, we want to see silver and the gold stocks leading. We got that this past week. Encouraging. Platinum didn’t cooperate and fell 0.2%, while palladium also fell, down 0.5%. Copper, however, gained 1.2%. As we’ve noted, copper’s rise is ultimately encouraging for gold, which usually correlates well with copper.

As noted, silver’s rise and lead was encouraging. Silver needs to break through $60 and then through $72 before we can even contemplate that a low is in. Silver recently reached a low at $54.74 at a time when gold did not see new lows for the move. A divergence? We also see a five-wave decline for silver, potentially an ABCDE pattern that, if correct, should soon see a rise underway. Following a rebound, typically we set back again.

Silver’s decline to near $54 is a classic move to test the previous breakout over $50. That said, we have considerable work to do to regain confidence and break out to the upside once again. Until then, downside risk remains. In a worst-case scenario, if we were to break under $50, we’d consider that the bull is over for the

time being. We don’t believe that will happen but, given how close we remain to $50, it is a concern.

Source: www.stockcharts.com

The gold stocks continue to exhibit similar patterns. Interestingly, this recent pullback has seen the TGD fall only 38% vs. 55% for silver and 30% for gold. When gold and silver fall, the gold stocks tend to underperform and a fall in this case by 70% wouldn’t be seen as unusual for the TGD. It hasn’t happened, so that is encouraging. The gold stocks appear to be under accumulation. But, like gold and silver, we need to break to new highs to suggest the decline is over. The TGD breaks out over 860. For the HUI, the point is 705, preferably over 740. Naturally, recent lows must hold. For the TGD 692 and the HUI 580.67. If that happened, we’d have to reconsider the entire bull market for the precious metals. We’d tolerate a small penetration, but the real danger point for everyone is gold under $3,800, silver under $50, the TGD under 650, and the HUI under 550. Let’s hope the seasonals work.

Source: www.stockcharts.com

Copyright David Chapman 2026

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